It is estimated that there are over 100 commercial animal feed manufacturers in Kenya. Most are members of the Association of Kenya Animal Feed Manufacturers (AKEFEMA).Registered under the Societies Act, AKEFEMA seeks to promote self-regulation in feeds quality and advocates for an enabling environment for the sector.
Notwithstanding existing quality standards from the Kenya Bureau of Standards, the feed industry is characterized by high cost feeds, low and variable feed quality, and over-dependence on high cost and inconsistent quality imported feed ingredients, particularly feed processing by-products. Feed
concentrates are a major item of the dairy farm expenditure and their availability is crucial for
productivity improvement, especially under the zero-grazing system of production. Commercial fodder production in the dairy sector is at its infancy. Cases of large scale farmers abandoning dairy farming in favour of fodder production have been noted. This would imply that commercial fodder production could be more profitable than dairy farming. There is a realization that availability of commercial
fodder, particularly maize, sorghum and Lucerne, is key to unlocking the production potential in the dairy sector. Cases of the dairy co-operative societies (e.g., Ndumberi) leasing large scale farms in distant locations for the purpose of commercial fodder production have been noted. Adequate fodder availability maintains milk production across seasons and sustains profits from dairy farming.
The importance of the fodder in the dairy value chain indicates the need to influence policy to mobilize both technical and financial resources in support of this sub-sector. This is an approach that the dairy sector stakeholders could champion with the support of development partners.
3.2.6
Veterinary and animal production services
Veterinary services are regulated under the Veterinary Surgeons Act, Cap 366.The Kenya Veterinary Board is mandated to control and manage animal related diseases and vectors. The Board also controls and regulates the professional conduct of veterinary practitioners. To control the spread of animal diseases, particularly from the pastoral ASAL regions to the high potential areas where dairy animals are reared, a system of animal movement permits in place should be enforced through allocation of more human and financial resources to the Veterinary department.
Animal diseases negatively impact animal health and productivity. Important notifiable diseases include foot and mouth disease, contagious bovine pleuro pneumonia (CBPP), lumpy skin, leucosis, anthrax and Rift Valley fever, East Coast fever. Emerging noticeable diseases include avian influenza. The Animal Disease Act, Cap 364, provides the framework for animal disease control. Technical capacity and budget limitations constrain the role of the veterinary department in outreach. Dairy farmers normally rely on AHITI diploma level veterinary technicians for disease management services. The legal framework to facilitate regulation of the para-veterinary staff does not exist and this is an area of concern for policy makers. Vaccines and drugs are available through veterinary retail outlets. The quality of these products is, however, not always assured due to weak statutory veterinary drugs quality monitoring. Vaccine availability can be limited and not affordable to some farmers.
Management of farm diseases including mastitis, zoonoses such as brucellosis and leptospirosis, and food safety (bacterial, antibiotics and aflatoxins contamination) need urgent attention. Less than 4% of the dairy farmers use teat dip for mastitis prevention and control.
Most smallholder farmers rely on crossbreeds between local and imported dairy cattle breeds to produce milk. The medium and large scale farmers maintain these exotic breeds, mainly Holstein- Friesians, Ayrshire and Jersey. Artificial insemination services are readily available. Smallholder dairy farmers in major milksheds use AI for breeding purposes. The cost and failure rate of the service is a matter of concern. In the marginal and low production areas (Western Kenya and Nyanza), the use of bulls for breeding is more prevalent.
The demand for AI doses is estimated to be about 1.0 million straws per year. KAGRC, the public agency responsible for breeding services, produces about 500,000 straws per year. The private sector imports 250,000 straws per year, mainly from Australia, New Zealand, Europe, Israel, South Africa and the USA. There is an apparent shortfall of 250,000 straws per year for dairy cattle breeding resulting in a shortage of improved replacement breeding stock.
3.2.7
Financial services
Financial services, particularly working capital, are needed at all stages of the dairy value chain. At producer level, breed improvement, AI, feeds/forages supply and disease control call for constant financial services support. While commercial banks lend to commercial medium and large scale dairy farmers, the same is not the case with smallholder farmers. However, the cooperatives have
endeavoured to provide embedded services to their cross-section of members including smallholder dairy farmers. For example, Githunguri provides inputs and drugs on credit to members against their milk revenue. The chilling hubs also provide embedded services to members at interest rates of 8 to 12% compared to 18% for commercially available loans. In addition, the chilling hubs provide credit to their members at competitive rates in comparison to commercial loans.
Breed improvement requires financial support. It is estimated that a good quality heifer could cost upward of KShs. 100,000 (~USD 1,500). It is often difficult to justify adequate return on investment for smallholder farmers on this type of investment because of low production. This reality undermines the ability of this category of farmer to access investment funds from commercial banks.
Investment in chilling hubs has been supported by development partners. The sustainability of this model, through private sector investors, could ensure continued improvement in smallholder dairy productivity. The continued support of the development partners will be required until such a time as private investors take up this role.
Innovation in the dairy sector is risky, but the sector needs to innovate and grow. This is particularly important with respect to the commercial medium and large scale dairy farmers. To mitigate the risks inherent in sector innovations, development partners could establish an Investment Fund to minimize these risks. These funds could be accessed through a challenge mechanism.